The Women and Work Commission will challenge the government to allow ‘class actions’ in gender pay disputes when it reports in January, Personnel Today has learned.
The proposals – designed to close the gender pay gap which stands at 18% for full-time and 40% for part-time workers – will allow women to bring a single pay discrimination case for an unlimited number of applicants.
Earlier this year, Jacqui Smith, minister for women and equality, said that allowing class actions would only be a last resort. But the commission’s chair, Baroness Prosser, told Personnel Today that class actions would be a very effective way to address the gender pay gap.
A review of discrimination law, chaired by the head of the Commission for Racial Equality, Trevor Phillips, is investigating how to make legislation more effective.
Prosser said some of the existing 34 pieces of discrimination law would be ‘wiped out’ by that review’s report in August 2006. “The idea that we can’t add something in during this process is just daft,” she said.
Unions have been clamouring for class actions, but employer groups have opposed the proposals, fearing that many staff will jump on the bandwagon.
Class actions are allowed in the US, where retail giant Wal-Mart is battling a high-profile gender bias lawsuit against up to 200,000 current and former female employees who claim they were paid less than male colleagues.
In the UK, the closest staff can get is a multiple action where employees bring separate cases, based on the same facts, against one employer.
In April, 1,500 female hospital workers in Cumbria used this process to fight for compensation for up to 14 years of pay inequality. Some will receive up to £240,000.
Less is less for women
Despite more women reaching senior positions, female executives are still paid 25% less than their male colleagues, according to research by the Institute of Directors and Croner Reward. A female director now earns an average of £55,000 per year, while a man would get £72,100.
Feedback from the profession
Chris Thomas, people and customers director, First Assist
“This would be a purposeful step forward in terms of equal opportunities, which, if anything, has been too long in the gestation [since the Equal Pay Act 1970]. If class actions are allowed, I would expect to see more concerted action from employers to avoid discrimination. The new scale of financial risks associated with successful claims is likely to cause employers to take the existing statutory framework much more seriously.”
Alison Hodgson, European HR and resourcing manager, Expedia
“When I was at Sodexho, we settled on a claim in the US this year for $80m. It was on access to opportunity by Hispanic and Black American employees after four years of complex proceedings in a part of the business (Marriott Services) acquired in the 1990s. I would be keen to understand more about the nature of the proposals – particularly when acquisitions have happened. The above example was an inherited legacy and very challenging to defend.”
Jonathan Evans, HR director, Westminster City Council
“We need to protect ourselves from people getting on the bandwagon. In some cases, class action will be the way forward, but in other situations it will be open to abuse. It may serve to encourage people who should come forward to do so when they otherwise wouldn’t, but there is a concern that the less scrupulous will jump on the bandwagon. I am not against it in principle, but we need to protect those who deserve it.”
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